1. Political risk arises from all of the following sources EXCEPT ________.
a. poor relations with other countries
b. infrequent change in the form of government
c. corrupt or poor political leadership
d. political involvement of military or religious leaders
2. An important distinction between democratic and totalitarian governments is the ________.
a. economic development of the country
b. absence of government
c. concentration of power
d. rate of growth
3. ________ foster stable business environments and increase international cooperation in many areas.
a. New political strategies
b. Favorable political relations
c. Bribery and corruption
d. All members of the United Nations
4. When we combine newly industrialized countries with countries that have the potential to become newly industrialized, we arrive at a category called ________.
a. developed countries
b. newly industrialized countries
c. emerging markets
d. developing countries
5. The United Nations’ human development index ________.
a. is another name for purchasing power parity
b. measures the extent to which a government equitably provides its people with along and healthy life, an education and a decent standard of living.
c.measures the extent to which a people’s needs are satisfied according to theirability to buy a home, finance an education, and find steady employment
d. incorporates life expectancy, educational attainment, and family size
6. If GDP per capita at PPP is lower in Country X than it is in Country Y, ________.
a. it costs more to buy the same basket of goods in Country X than it does in Country Y
b. it costs less to buy the same basket of goods in Country X than it does in Country Y
c. it costs the same to buy the same basket of goods in both countries
d. this is insufficient information to make any assumptions about the cost of living in these two countries
7. During which stage of the international product life cycle theory does high purchasing power and buyer demand in an industrialized nation encourage a company to design and introduce a new product concept?________
a. Idiosyncratic stage
b. New product stage
c. Maturing product stage
d. Standardized product stage
8. When a product’s components are made in the country that can produce them at a high level of productivity and then assembled in another country, the production pattern resembles the theory of ________.
a. comparative advantage
b. absolute advantage
c. international product life cycle
d. factor proportions
9. The _______ theory states that countries produce and export goods that require resources that are abundant, and import goods that require resources in short supply.
a. new trade
b. absolute advantage
c. international product life cycle
d. factor proportions
10. Governments impose trade barriers for all of the following reasons EXCEPT ________.
a. to preserve national security
b. to gain influence over other nations
c. to respond to other nation’s fair trade practices
d. to protect jobs
11. ________ believe that government intervention can help companies take advantage of being the first movers in their industries.
a. Opponents of globalization
b. New trade theorists
c. Critics of strategic trade policy
d. Cultural imperialists
12. Through the Overseas Private Investment Corporation, companies that invest abroad caninsure against loss due to ________.
a. war, revolution, and insurrection
b. expropriation by a host-nation government
c. currency inconvertibility
d. all of the above